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Elon & Twitter
- Thread starter Buckminster
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Daniel in SD
(supervised)
Twitter doesn't claim that though.
They attempt to not count bots in their monetizable daily active users number and they audit a random sample of 100 monthly to see how well they're doing. They claim that less than 5% of that number is bots. And of course they also have a bunch of disclaimers for their methodology.
Elon shouldn't have waived due diligence if he wanted to use his own metrics.
bkp_duke
Well-Known Member
^From Twitter's own SEC filing. Where is the lie?
The ALLEGED claim of 5% bots is what would be the lie. Twitter's corporate language that you quoted, despite their attempt to cover their butts, doesn't give them actual cover if the real number of bots are much greater than 5%.
Under the law, this would fall under "materially false statement".
I've been involved in a corporate acquisition (we were the buyers) that went to arbitration. The company we were buying had a much larger number of "fake accounts" on the customer base than they estimated, and this was born out AFTER the agreement was reached, but before payment issued. The arbiter sided with us, and flat out told the seller of the company that the last thing they wanted to do was go to court over this because their "methods" for determining fake accounts was considered inadequate by "any reasonable measure". This lowered the purchase price we paid for this company by 20%, plus they seller had to pay our attorney costs (and their own).
Basically - there is no phrasing that Twitter can attach to their filings to cover their butts for an egregious lie (i.e. a materially false statement) like people here are presuming they can. If the bots are something like 7-10%, a judge will laugh at Elon, tell him to pony up the full price, and the deal is done and Twitter was "right". If, however, the bots are something like 25% of user accounts, the judge will tell Twitter that they have to lower their case, and the judge will likely refer over the "findings" to the SEC for penalties.
What doesn't pass the sniff test here is Twitter REFUSING to open the data up to Elon to make a 3rd party calculation. That's highly suspicious, and I would expect a judge will come down on Elon's side here and tell Twitter to release the requested data.
bkp_duke
Well-Known Member
See above, "disclaimers" don't protect you against a "materially false statement". It's considered "Fraudulent Misrepresentation".
Fraudulent Misrepresentation - FindLaw
Anyone who runs a business understands that most transactions and agreements are sealed with a contract, even if it's just a handshake. At its core, contract law regulates the transfer of rights from one party to another, holding each party accountable to the agreed-upon terms. It's of utmost...
www.findlaw.com
A finding such as that would void the entire "waiver of due diligence".
It's a legal hill for Elon to climb, but it's not a mountain, not by any stretch.
bkp_duke
Well-Known Member
One of the largest, and most notorious Fraudulent Misrepresentation cases in recent memory was by a company that HP purchased.
www.wbur.org
www.cio.com
It can be HARD to claw back those funds afterwards, so if Elon has "new" suspicion since the deal was signed, his waiver can be broken to pursue those.
HP Takes $8.8 Billion Hit From 'Misrepresentations' By Company It Bought
Hewlett-Packard wiped that huge amount of money off its books last quarter, it says, because of problems with the finances of a British software company it bought last year.
www.wbur.org
The HP-Autonomy lawsuit: Timeline of an M&A disaster
When Hewlett Packard bought knowledge management software firm Autonomy, it didn’t realize it was buying into a multibillion accounting cover-up. Shareholders sued HP, and HP sued Autonomy CEO Mike Lynch. Here’s how it played out over the decades.
www.cio.com
It can be HARD to claw back those funds afterwards, so if Elon has "new" suspicion since the deal was signed, his waiver can be broken to pursue those.
_Redshift_
Member
It’s got nothing to do with the politics, everything about his distractions leading to even more bad things happening at Tesla than they are currently.
Daniel in SD
(supervised)
It seems like you're saying that waiving due diligence means nothing because the buyer can always request whatever data they want by claiming that the SEC filings are false.
What a S$!^show
www.bloomberg.com
Texas Attorney General Opens Investigation of Twitter Bots
Texas Attorney General Opens Investigation of Twitter Bots
Texas Attorney General Ken Paxton said he opened an investigation of Twitter, claiming the social media platform may be misleading people with false reporting of its bot accounts, violating the Texas Deceptive Trade Practices Act.
www.bloomberg.com
bkp_duke
Well-Known Member
No, you are making an overly blanket statement (hyperbolize much?).
What I said, based upon US case law and some personal experience with a merger, was a SPECIFIC set of circumstances that would negate his waiving of due diligence.
Daniel in SD
(supervised)
It just seems like Elon is trying to get out of the deal. I can understand why Twitter would be suspicious of his motives and not want to hand him any proprietary information. Especially given that he's already violated the agreement by disparaging the company and employees.
bkp_duke
Well-Known Member
Doesn't matter if Twitter is "suspicious". Elon now, by contract, has a right to access to that data. From a legal standpoint, that one is a slam dunk, legally, regardless of the presence of an NDA (which the alleged violation of doesn't give Twitter rights to not provide him that data - if you understand how NDAs are written - they are very "compartmentalized").
I used to have the same understanding as you, however the SEC filing quoted in post Elon & Twitter seems to indicate a different situation:
- Twitter is NOT claiming that the bot/spam ratio of all users is only 5%.
- What they claim is that they REMOVE the bots/spam account already identified by them from consideration of the "monetizable daily active users" (mDAU), then run a test of 100 random mDAUs daily to verify that they are not bots, and found 5% of those are bots.
- This means the 5% is the error rate of their pre-filtering technique when defining mDAUs
- The total number of bots could be as high as 75% of total users and that would not invalidate their statement if they correctly pre-filter most of those
- people (like SMR) pointing out that so many of their followers are actually bots does not invalidate the statement made by Twitter to SEC
Whether the 5% statement is correct or not depends very much on their pre-filtering of bots, how that algorithm works, what data it uses, how accurate that is. This is what Elon would like to examine, so he is asking for raw data.
bkp_duke
Well-Known Member
I read that too. I was simply stating what I believe to be Elon's viewpoint.
Regardless, it's clear that this one is going to end up for the courts to decide.
So grab some popcorn, the show's far from over.
Daniel in SD
(supervised)
That's not my interpretation of the contract (or Twitter's). But I'm no lawyer, it will be interesting to see what happens!
EVNow
Well-Known Member
So, you have read and understood all this better than Elon’s investment advisors’ group of professional lawyers ?
Live footage of Elon trying to get a refund on his dead bird:
Daniel in SD
(supervised)
Professional hardcore lawyers.
If Elon read it then why is he only now complaining about the methodology?
EVNow
Well-Known Member
_Redshift_
Member
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